Chipmaker TSMC Halts Huawei Orders Following U.S. Restrictions

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The Taiwan Semiconductor Manufacturing Co. (TSMC) has reportedly halted new orders from Chinese tech giant Huawei Technologies following the Trump administration’s move to further limit chip supplies to the Chinese company.

Last week, Breitbart News reported that the Trump administration had moved to block shipments of semiconductors to Huawei Technologies from global chipmakers. The U.S. Commerce Department stated that it was amending an export rule to “strategically target Huawei’s acquisition of semiconductors that are the direct product of certain U.S. software and technology.”

China reacted to the news swiftly, stating that it was ready to put U.S. companies on an “unreliable entity list,” in response to the new limits on Huawei, according to China’s state-run Global Times. These measures would include launching investigations and imposing restrictions on U.S. companies such s Apple, Cisco Systems, Qualcomm, as well as suspending the purchase of Boeing Co. airplanes, the report stated citing a source.

Now, TSMC, the largest contract chipmaker in the world, has reportedly stopped new orders from Huawei, according to Nikkei Asian Review. Orders which TSMC took before the new ban and those already in production are not impacted and may continue to proceed if the chips are shipped before mid-September.

“TSMC has stopped taking new orders from Huawei after the new rule change was announced to fully comply with the latest export control regulation,” a person familiar with the situation said. “But those already in production and those orders which TSMC took before the new ban are not impacted and could continue to proceed if those chips could be shipped before mid-September.”

“It’s a difficult decision for TSMC, as Huawei is the company’s No. 2 customer, but the chipmaker has to follow the U.S. rules,” another person familiar with the matter said.

Last week, TSMC also announced plans to build a $12 billion factory in Arizona in what appears to be a win for the Trump administration’s attempts to bring more global tech supply chains to the United States.

The factory will reportedly create over 1,600 jobs and comes as President Trump has criticized China’s trade practices and Beijing’s handling of the Wuhan coronavirus. U.S. Secretary of Commerce Wilbur Ross stated that the deal was “another indication that President Trump’s policy agenda has led to a renaissance in American manufacturing.”

TSMC commented: “This project is of critical, strategic importance to a vibrant and competitive U.S. semiconductor ecosystem that enables leading U.S. companies to fabricate their cutting-edge semiconductor products within the United States.”

Commenting on the report from Nikkei, TSMC stated that it does not disclose order details and that the report was “purely market rumor,” while Huawei declined to comment completely.

Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan or contact via secure email at the address lucasnolan@protonmail.com

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